Five crucial anti-fraud strategies

To this day, there are no clear cut solutions nor a blueprint of what retailers should do when it comes to creating the perfect anti-fraud solution.

Here, Gia Janashvili, the co-founder of Veli Services, a B2B2C tech company that focuses on fraud detection, talks about possible strategies.

He notes that retailers should be aware that new types of fraud are emerging and being hyper focused on one type can be detrimental to a business.

In this article, we will showcase Janashvili’s views and guides on creating a suitable anti-fraud strategy. So, if you are in the retail market, this is how you can protect your business.

Beware of new types of frauds

Retailers know that when you are operating in a specific market, you should have measures in place regarding fraud that is common in that market.

With the ever changing landscape of fraud threats, it can be hard to stay up-to-date on the latest strategies for protecting your business.

At a point in time, the measures might prevent fraud; however, it is wise to keep up-to-date with your strategies and constantly review your measures. Janashvili proposes five steps to help you develop your anti-fraud strategy.

1. Types of fraud that target your industry

The first thing you need to do is assess the vulnerable points of your particular business. You want to conduct a risk assessment to see where your line of work is sensitive to risk.

This assessment will be based on your unique business, the scale of your operations, the products or services you sell, and how much you are exposed to the market.

When you know all of the risks involved, you can calculate the chances they can happen and the costs of them happening.

2. Know your customer base and build robust profiles

The next move is to know your customer base and understand how people buy your products or use your services. The point here is to have a broader perspective on your customers — start with where they come from, their demographics, and how often they visit the site.

Then, consider what they’re looking for and what they could get out of your service. All this is done in order to build a vital customer profile and spot anomalies within your business.

3. Invest and implement analytical tools for detecting and preventing fraud

Technology is our friend — you have various analytical tools and software to help you detect and prevent fraud.

Janashvili, having gained experience from the iGaming industry, says that using the right tools can make a massive difference in creating an anti-fraud environment.

Today, you have machine learning algorithms that can detect fraud by complex scoring models using data from transactions across your network.

Regardless of the type of tool you use, they share similar features. First is the geolocation tagging, which identifies the customer's IP address.

Then, there’s the BIN (Bank Identification Number) checker which is used to determine the country and bank using the first few digits of the credit card.

Finally, almost all tools use fingerprinting, which allows retailers to know and track individual devices.

4. Strong system of internal controls

Having the right people around you is most likely to result in a positive outcome. Recruiting the right expertise is essential. Someone has to monitor the software or other analytical data regarding fraud so that you can be a step ahead.

Now, for some retailers, finding the right new people can be challenging, and that is why many businesses train some of their existing staff. In any case, the plan will stand firm if the team is up to date on all new types of fraud and has the right tools to fight it.

5. Continuous research and communication with your team

As we mentioned numerous times, different types of fraudulent activities are always popping up. Staying up to date is essential. Having someone on your team tasked with research will help you stay a step ahead and can potentially save your business.

However, acquiring new information won’t do any good if it isn’t shared. That’s why communication is a key step to developing the most robust anti-fraud strategy.